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Lord Sainsbury of Turville: My Lords, while it may be felt that the report is a response to last night's debate, the record will show that it was requested eight months ago. It has not been cooked up overnight! I believe that we are approaching the problem reasonably by saying that this is a serious issue which requires serious consideration. We came forward with the report as soon as possible.

I agree with the noble Lord as regards security. It is an extremely important issue in deprived urban areas and we shall use the modernisation fund in dealing with it.

Lord Clarke of Hampstead: My Lords, I declare my interest as a former Post Office worker and former official of the Union of Post Office Workers. Having done so on a number of occasions, it will come as no surprise to your Lordships' House. Although I am an outspoken critic of the Government's overall plans for the future of the Post Office, which we shall discuss tomorrow, it would be churlish not to welcome the general thrust of today's Statement. However, a couple of elements are missing.

The first is the lack of reference to Crown offices in any form or detail. They are a valuable part of the network, providing Post Office workers who offer back-up services, training and reserve forces for emergencies when postmasters are in need of them. The Crown offices deserve a mention in the Government's overall vision.

Secondly, as I have not seen the PIU report I should like to know more about the universal bank. Will it be a copy of the highly successful National Giro Bank which was created by the Post Office and sold off by the previous administration at a knock-down price? At the time of its sale, it was successful and efficient and there was a long waiting list of people who wanted to open accounts. The Scotsman was the only newspaper

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to tell the truth about the whole charade of selling off the bank. It is a disgrace which will haunt the previous administration for many years to come.

I do not believe that the report was brought forward to today because of last night's performance; I believe that it was done because of tomorrow's performance. It is pre-empting what we are to discuss tomorrow, and I find that a little unsatisfactory. However, I feel that some mention should be made of the Crown office network and the work done by its managers and staff. I believe also that more information should be made available about the universal bank. It would do the Government great credit if they were to start again and create another national Girobank which served the public and was socially useful and efficient.

Lord Sainsbury of Turville: My Lords, I am glad that my noble friend welcomes the general thrust of the report before we return to our discussions tomorrow. The report covers the Crown offices but there is no change in government policy in relation to them. We are still committed to maintaining 15 per cent of the business which goes through the Crown offices.

The services which will be offered by the universal bank are covered, I believe, on page 73 of the PIU report. They are not exactly the same as those of the Girobank because the situation is slightly different. However, I believe that it is an important initiative which could have enormous social benefits if, over the years, it brings more people into the banking system.

I do not believe that noble Lords can have it both ways. We were asked whether we could possibly bring the matter forward before the Postal Services Bill had been through the House, although it should be said that that Bill concerns the public status of the Post Office and not the network. We tried to meet the commitment to the House to bring the matter forward, but it is a trifle harsh for noble Lords then to say that we did so only because of the debate the following day.

Lady Saltoun of Abernethy: My Lords, perhaps I may ask the Minister three brief questions. First, will customers be charged for banking services? I believe that the noble Baroness, Lady Buscombe, asked that question and I do not seem to remember that she received an answer. Secondly, at present certain services, such as the sale of car tax discs, are provided only by Crown post offices. Will those services be extended to all post offices? Thirdly, what will happen to small rural post offices in shops where space prohibits any degree of expansion?

Lord Sainsbury of Turville: My Lords, if the explanation was not clear, I shall repeat it. We have made clear on a number of occasions that benefits can be collected in cash and there will be no charge. People will receive benefits exactly as they did previously. There will be no difference. If people ask for more bank services or if we wish to extend them, that is obviously a different question.

With regard to Crown services, so far as I know there is no proposal to extend the services which currently are provided only by Crown offices to sub-post offices. I believe that that is due to the fact that if

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the full range of Crown office services were to be provided in a rural post office, there would be too many with which to deal and operation would become difficult. I believe that those were the two main questions asked.

Earl Russell: My Lords, a Frenchman once fell off the top of the Eiffel Tower and, when half-way down, was heard to murmur, "Good, if it lasts". I hope that the Minister understands why I welcome the Statement in that spirit.

It may be said that if the issue were urgent people would have taken it up earlier. Perhaps I may make it clear that that does not apply to these Benches. I have been trying to remember when I was first alerted to the matter by my honourable friend Mr Kirkwood. I believe that it was in the Parliament before last, and that is not exactly a case of "Archie-come-lately".

I am concerned especially with the social security issues involved. I welcome warmly the provision for people to receive benefits at the post office in cash. However, as benefit provision has very little spare fat, I should like to ask whether they can do so without paying bank charges, which many of them are not in a position to do.

In addition, as some benefit income, such as housing benefit, is necessarily on occasion irregular, will the Minister and his noble friend Lady Hollis of Heigham consult each other about the rather more long-term problem regarding whether people on benefit might be able to receive small amounts of credit on rather more generous terms than those they receive at present from loan sharks?

Lord Sainsbury of Turville: My Lords, I am happy to exonerate the Liberal Democrats from any suggestion that they have not always been keen to make this proposal, although I suspect that the noble Earl's comment was not aimed at me but at the other Benches.

So far as bank charges are concerned, I repeat that people will be able to receive benefits in cash without paying bank charges. That is fundamental to the issue. However, I believe that it should be made absolutely clear that a credit facility is not being provided and, indeed, people will not be able to get into debt with the universal bank. That point is clear and important and should be understood.

Lord Lipsey: My Lords, will my noble friend join with me in congratulating the PIU on the open and innovative way in which it conducted the inquiry and on the splendid report it produced? Will he also take to heart the very wise words of the noble Baroness, Lady Buscombe, that there is no security in subsidy and, in particular, that if there is one thing worse than explicit subsidy it is hidden subsidy provided by distorting the social security system? That is a rotten way to go about this very important task. Therefore, will he agree that the measures in the PIU report, including the provision of funds to encourage shops to invest so that they have a long-term future, represent the true way

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forward; that is, not allowing the tail of social security to wag the dog of keeping rural post offices prosperous?

Lord Sainsbury of Turville: My Lords, I believe that the PIU report is excellent because it considers commercial issues and commercial viability while taking account very strongly of the social issues. I believe that it is that mix which makes the report so impressive.

I agree totally that there is no security in subsidy. That is why the matter is structured very carefully. It concerns the provision of support to sub-postmasters while they obtain extra business to develop their operations. It combines financial assistance with an attempt to return to viability. I agree totally with my noble friend that a hidden subsidy, particularly one based on over-paying for services while keeping those services inefficient, seems to be the worst conceivable way of providing assistance. If financial assistance of some kind is to be provided, it should be on a basis which leads to a viable system.

The idea of keeping antiquated systems is one to which people seem to return again and again. They believe that keeping old systems which everyone knows are long out of date is a way of keeping the service viable. It is not, because, first, people will vote with their feet and, secondly, it is a way of hiding financial assistance, which means that the matter is not being addressed properly.

Lord Skelmersdale: My Lords, I congratulate the Minister on circulating to some Members of the House as early as he decently could a copy of the PIU report, especially to noble Lords who, like me, are interested in the Postal Services Bill, which we shall debate tomorrow. However, I did not hear the Minister's answer to my noble friend's question. Is there anything in the PIU report which will necessitate a government amendment either to the Bill or, indeed, to the draft licence, which he has also circulated to Members of the House who are interested in that Bill?

I agree with the noble Lord, Lord Clarke of Hampstead, that the Post Office Girobank was spectacularly successful as a bank, but unfortunately it did not act as the bank to ease low-income families into the banking system, as the PIU suggests that a universal bank should do. If it had succeeded in that, we would not find that more than 15 per cent of adults do not have a current account.

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